Vallabhai Patel Kottapalli Vs ITO (ITAT Visakhapatnam)
ITAT Vizag Restricts Section 115BBE Levy to 30% – 60% Rate Not for AY 2017-18- Conflicting HC Rulings – Tribunal Adopts Assessee-Friendly View on Section 115BBE
Assessee, an agriculturist, had deposited Rs. 11.69 lakh during demonetisation. AO completed best judgment assessment u/s 144, treating Rs. 10.19 lakh as unexplained cash u/s 69A, & taxed it u/s 115BBE @60%. CIT(A) confirmed ex parte. On further appeal, though grounds on merits were not pressed, Assessee raised an additional legal ground that higher rate of 60% introduced by the Taxation Laws (Second Amendment) Act, 2016, effective from 01.04.2017, would apply only from AY 2018-19 & not AY 2017-18.
Tribunal noted conflicting views of non-jurisdictional High Courts – Kerala HC in Maruthi Babu Rao Jadav holding 60% rate applicable from AY 2017-18, & Madras HC in S.M.I.L.E Microfinance Ltd. holding it applicable only from AY 2018-19. Following Bombay HC in K. Subramanian v. Siemens India Ltd., Tribunal held that when non-jurisdictional HC views conflict, the view favourable to Assessee must be adopted. Accordingly, AO was directed to recompute tax at 30% as per pre-amended s.115BBE. Thus, the appeal was partly allowed, granting relief on tax rate though addition u/s 69A was sustained.
